“When Good Tax Cuts Go Bad”

When Good Tax Cuts Go Bad

Tom Rowan

Tax cuts are a form of stimulus which puts more money in the pockets of Americans by not charging them as much, in comparison to a stimulus package that sends a check to families from the government, which Americans will eventually have to pay back in taxes. In America’s current economy, the above forms of stimulus can be put into 2 cateogries: an eventual increase in the cash flow of americans that doesnt hurt anybody, an immediate gratification that always comes back to bite. The american government has tried a stimulus package that not only did not work, in furthered the governments debt which the Americans are now struggling to pay off. Now, the government is looking to “the rich” to pay off their debt, something the politicians themselves, while they would all be in the “rich category” will not participate in because they are exempt from taxation. They may have yachts and multiple houses, but the other “rich” americans must pay what is now close to half of their income to support this flawed failed system. How much is too much? And how long does it have to be before the politicians who issue these taxes have to join in the payment of them? According to the Laffer curve, eventually the government will ask so much of the rich that they will work less because their is no financial incentive for earning a higher income, as they will have the same income as someone who works half as much as they do. Not only will this promote even more laziness in the American economy, the government will begin to earn less than they would with a lower tax rate.